Homeowner, Appraiser Opinions on Value Continue to Diverge

Home values continued to climb, rising by 0.24% across the U.S. These values have climbed 4.64% since May of last year.

Homeowner perceptions of home value outpaced the opinions of appraisers by more than 1% in May, the first time that threshold has been crossed in 22 months. Despite this, appraiser opinions are still higher than those of homeowners in the majority of the areas surveyed.

Home Value Index (HVI)

Home values increased by 0.24% in May. This was despite downturns in the Midwest and West. Market prices have risen to 4.64% this year.

Walters said that although value increases have been slowing down, it’s just what the market needs at this point.

“While smaller monthly increases and a slowing of the annual growth may sound discouraging, it is precisely the measured, healthy growth that is needed to embolden home buyers and create a sustainable housing market,” said Walters. “A more balanced market between buyers and sellers almost always leads to continued steady home value increases.”

Turning to the regional breakdown, values decreased by 0.09% and 0.19% in the West and Midwest, respectively. This loss was more than offset by gains of 0.62% and 0.12% in the South and Northeast.

Home Price Perception Index (HPPI)

This month’s HPPI showed that appraiser opinions were 1.15% lower than homeowner opinions nationwide. This enlarges the gap from 0.69% in April. Still, appraiser opinions remain higher in the majority of areas across the country. The gap in estimates has also narrowed from this time last year when appraiser opinions were 2.05% higher than those of homeowners.

Quicken Loans Chief Economist Bob Walters said that when it comes to your property value, local markets are king.

“The HPPI, more than anything, is a reminder that there is no such thing as a national housing market,” said Walters. “Every city, and every neighborhood, moves in different directions based on local factors. Consumers need to remember to watch their local area closely to understand the direction their market is heading.”

The West is the only region where appraiser opinions are higher than those of homeowners, coming in at 0.16%. In the South, opinions are virtually dead even with homeowners 0.03% higher. In the Northeast and Midwest, that gap is 0.24% and 1.67%, respectively.

Turning to metro areas, San Diego is the place where there’s the most agreement between appraisers and homeowners on value, with homeowners assigning their homes 0.19% greater value than appraisers. This is contrasted with San Jose, CA where appraiser opinions of value was 6.38% higher than those of homeowners. In Kansas City, MO homeowners overvalued their homes by 3.24%.

The Quicken Loans Home Price Perception and Home Value Indexes are released on the second Tuesday of the month on the Quicken Loans Press Room.

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